Challenge Finance Ltd v Accolade Pty Ltd

[1989] FCA 620

JUCGMENT No. .. , 620 y. % 9 ........ .- "

IN THE FEDERAL COURT	)	LIMITED DISTRIBUTION
OF AUSTRALIA	1
WESTERN AUSTRALIA	)
DISTRICT REGISTRY	)
GENERAL DIVISION	1	NO. WAG 36 OF 1989
B E T W E E N :	CHALLENGE FINANCE LIMITED
and ACCOLADE PTY. LTD

Respondent

CORAM: LEE J.

DATE : 1 JUNE 1989

EX TEMPORE REASONS FOR JUDGMENT

On 11 April 1989 the applicant flled an application and statement of claim in this matter. The statement of claim alleges that the respondent, rn connection wlth the supply to the applicant by the respondent of steel plate silos, misled the applicant by providing an Invoice which overstated the cost of the silos. The statement of claim also alleges that the supply of the silos to the applicant was for the purpose of the applicant leasing them to Australian Carbon Ltd. ( "ACL") . The applicant clalms damages for alleged breaches of ss.52 and 53 of the Trade Practices Act 1974 ("the Act").

of the statement of claim be struck out.

On 26 May 1989 the respondent filed a motion to strike
out the statement of claim or alternatively that paras.7, 8 and 9

I have reached a firm conclusion that the statement of claim as drawn creates severe problems for the respondent in pleading its defence. In its lack of particularity and pleading of material facts, the statement of claim presents an embarrassment for the respondent to attempt to plead a defence.

It is obvious after hearing counsel, that the statement of claim is somewhat removed from the actual facts that are likely to emerge at the hearing of this matter and the opportunity should now be taken to have the statement of claim accord with those understood facts and to endeavour to plead a cause of action accordingly.

I think the way that goal may be achieved is for there to be an appropriate pleading of the factual issues that are partly addressed in the existing pleading. When that is done the relevant facts will be allowed to emerge from the pleading and a cause of action can be identified. For example, I think that the matter of the relationship between ACL and the respondent will have to be identified. If there is a contract for the

date and essential terms should be set out.	construction and installation of the silos then details of its
If it is being alleged that there was an agreement between the applicant and ACL that the applicant would purchase property from ACL then that matter should be pleaded accordingly including details of the elements of that agreement, namely the property being purchased and the price to be paid. If it is alleged that it was a term of the agreement that whatever ACL was paying to the respondent was to be the price of the bargain between the applicant and ACL then that term should be set out.
It is only in the context of those allegations that one can draw any inferences in relation to any pleadings about the presentation of invoices. If it is alleged that completed items were to be purchased - I understood that they were completed and in situ - including the cost of installation as part of the price, in other words that the price was calculated by the price paid under the original contract plus the cost of installation, then that should be set out in the pleading.
If it is being alleged there was some financing arrangement at the completion of which title in the goods would pass, in other words, the financing of the construction contract, then that should be set out. Such circumstances present a totally different situation from that pleaded and have a bearing on the import of the delivery of the property and the invoice for its
cost. It would also mean that the relevant dates will then have to be supplied, as understood by the applicant, as to the date of
construction, installation and so on.
Similarly, the applicant having made it clear that it 1s alleging conduct that is deceptive, rather than merely misleading, the actual price that should have been paid according to the agreement should be pleaded. Thls should be done by referring to foregoing matters that I have outlined in order to establish a calculated price for it or, alternatively, the value of the property at the time of acquisition.
Having pleaded its claim in that way the applicant will then have to consider whether there is any room for pleading in the terms of sub-paras.g(a) and 9(b) which allege that the respondent acted in breach of s.53 of the Act. On the present pleadings there is no room for those sub-paragraphs and the s.52 pleading is most doubtful. As the pleadlng stands, it may do no more than raise a suggestion that ACL had presented the respondent's invoice to the applicant without appropriate deductions and that the respondent had done no more than provide an increase for the actual price that it was charging for the construction and installation of the silos. If the pleading is going to be in the terms that there was a contract or a purchase between the applicant and ACL, it would seem to be difficult for
stand. the matters set out in sub-paras.g(a) and 9(b) to continue to
Having pleaded the difference between what was paid and what should have been paid according to the price that was actually agreed although not then calculated or alternatively according to the actual value at the time of purchase, there should then be some pleading, bearing in mind there is a lease agreement on foot, that there is no prospect of recovery of any residual value or for the property to earn income under the lease because of the liquidation of the lessee and the guarantor.
Taking all of those matters into account, my conclusion is that the only way in which these allegations can be satisfactorily pleaded is by a complete re-drafting of the statement of claim. It would be pointless to grant leave to amend the statement of claim generally when the amendments will be substantial and the substance of the statement of claim will be altered.
Therefore, I intend to provide the appllcant with an opportunity to re-plead its statement of claim, by striking out the statement of claim as it now stands and granting leave to the appllcant to file a statement of claim in substitution. There will be an order for costs in the terms of motion.

I certify that the preceding

five (5) pages are a true copy of the

Reasons for Judgment of his Honour Mr Justice Lee.

Associate:	L
Date:	----

Counsel for the Applicant:  Mr B. Dharmananda

Solicitor for the Applicant: Mallesons Stephen Jacques

Counsel for the Respondent:  Mr J.R.B. Ley

Solicitor for the Respondent: Freehill, Hollingdale and Page

Date of Hearing:  1 June 1989

Date of Judgment: 1 June 1989